Musk Criticizes California’s Proposed Solar Tax


This article was originally published on TipRanks.com

At a time when the United States is pushing towards green and sustainable energy solutions to tackle climate change, California Governor Gavin Newsom has plans to curb incentives for rooftop solar systems.

Residential solar consumers in California have started a campaign to tell Governor Newsom and the California Public Utilities Commission. (CPUC) to reject the proposed solar tax and retroactive changes to existing solar customers.

CEO of Tesla, Elon Musk, tweeted, “Bizarre anti-environment move by govt of California,” and shared the campaign link started by The Tesla Silicon Valley Club, a loyal fanbase of Tesla Inc.’s (TSLA) electric vehicles and solar panels.

New Net Energy Metering rules (NEM 3.0)

The California Public Utilities Commission (CPUC) is considering a proposal called the new net metering rules (NEM 3.0), which will directly impact customers who have solar panels installed on the rooftops or are planning to install in the future. The proposal for NEM 3.0 rules is due for voting on January 27, 2022, and will be effective from May 28, 2022.

As per the new rules, customers will be charged a grid access fee of $8/kW per month on the residential solar instalations. This will increase their monthly electric outflow to anywhere between $50-$80 when added with other fees.

However, this monthly fee is still quite low compared to the fees paid by customers who do not have a solar roof, which is approximately $100 per month, as pointed out by CPUC.

Another aspect of the debate pertains to residential solar customers who sell the excess energy back to the grid and receive credit thereon; should these customers be paid the “actual avoided cost” instead of the retail electricity rate?

For existing home solar customers, who have installed the solar roofs under the NEM 1.0 and NEM 2.0 rules, the “grandfathering period” has been reduced to 15 years from 20 years. Accordingly, these customers would come under the NEM 3.0 rule 5 years earlier than expected.

Critics of NEM 3.0

Musk and his several followers are worried that such proposals would hinder people’s interest in clean energy alternatives, resulting in a long-lasting impact on the environment.

According to the San Diego Union-Tribune, after reading the draft proposal, Governor Newsom said, “We still have some work to do… Do I think changes need to be made? Yes, I do.”

The statement offers some solace to the solar homeowners and there is hope that appropriate action will be taken for the benefit of both the people and the environment at large.

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